Bressler Risk Blog

“Cooley Hit With $15M Legal Malpractice Verdict” —

• “A jury in New Jersey state court on Friday delivered a nearly $16 million jury verdict against Cooley in a legal malpractice and breach of fiduciary duty suit.”
• “The eight-year-old suit was filed by plaintiff John Gregg in New Jersey Superior Court in Mercer County on Oct. 26, 2017. Gregg claimed Cooley had failed to disclose a conflict of interest in the course of negotiating financing for Symbiomix Therapeutics, a drug development company that he controlled and later lost ownership of as a result of Cooley’s legal advice.”
• “‘We strongly disagree with the verdict and will be pursuing an appeal,’ Cooley said through a spokesperson. ‘The evidence presented throughout this matter demonstrated that our attorneys acted with professionalism, diligence, and integrity. We stand firmly behind their conduct and look forward to a fair and thorough review by the appellate court.'”
• “Gregg’s relationship with Cooley began in 2009, when he contracted the firm to provide legal advice on the intellectual property portfolio he controlled through the company Symbiomix, which consisted of multiple antibiotic drugs, court filings read. Founded in 2012, Symbiomix was acquired by Indian drug manufacturer Lupin for roughly $150 million on Oct. 11, 2017. Cooley represented Symbiomix in the sale.”
• “According to court documents, Cooley was representing both Symbiomix on the sell side and had also advised investors on the buy side of the deal in separate matters, creating a conflict of interest. Gregg’s suit claimed that Cooley wrongly prioritized the interests of the investors in Symbiomix, including OrbiMed and Fidelity Biosciences, which created a conflict of interest and disadvantaged Gregg as a Cooley client.”
• “‘Cooley committed malpractice and breached its fiduciary duties to Mr. Gregg when, in connection with attempting to close a financing deal with the VCs so that Cooley could get paid, Cooley advised Mr. Gregg to surrender his personal ownership of the provisional patents he had obtained’ for antibiotics the company had developed, the October 2017 lawsuit read.”
• “Cooley’s compensation was partly contingent on a Series A venture capital funding deal being completed, which led to the firm advising Gregg to take an inferior deal that removed him from company leadership roles and caused him to lose equity in the company, the lawsuit read.”
• “Cooley advised Gregg to ‘dilute his ownership and control of Symbiomix such that he could be frozen out of the future, massive benefits that would later enrich the VCs and Cooley, all at the expense of Cooley’s client,’ Gregg’s lawyers wrote in the suit.”
• “The jury voted unanimously 8-0 to hold Cooley accountable for the legal malpractice and levied a $15.65 million verdict against the law firm. But the overall amount of damages could be higher, as Gregg is still entitled to attorney’s fees and prejudgment interest for the last eight years.”

“Federal prosecutors question conflict of interest in Steven Tompkins’ pot extortion case” —

• “Federal prosecutors who allege that Suffolk Sheriff Steven Tompkins extorted a Boston cannabis company are requesting the court to consider whether the defense counsel’s representation poses a conflict of interest in the case.”
• “In a request for a hearing, prosecutors outline how Tompkins’ defense counsel, Martin Weinberg, ‘previously represented’ the attorney for the cannabis company they argue was extorted and how the two share a ‘close professional working relationship.'”
• “‘The trust, camaraderie, and respect that grew from that relationship cannot be underestimated,’ Assistant U.S. Attorney John Mulcahy wrote in the request filed on Tuesday. ‘In fact, following that case, Defense Counsel took on Attorney A, not as a client, but as a partner, in handling serious criminal matters in federal criminal court.'”
• “Prosecutors are also pointing to how Tompkins’ defense counsel ‘selected, presumably prepared, and called’ the cannabis company’s attorney at a sentencing hearing in another case in November 2023.”
• “Tompkins, 67, is accused of using his official position to bully executives at a Boston cannabis company regarding his pre-initial public offering investment of $50,000. Following the IPO, his indictment states, his investment value ballooned to $140,000, but then fell below his initial investment value.”
• “Prosecutors argue the sheriff, who has been on medical leave following his indictment in August, used his position to demand his full initial investment back to ‘help pay for campaign and personal expenses.'”
• “In response to the prosecution’s request for a hearing, defense attorney Weinberg wrote that he has ‘never represented Individual A and owes no ethical obligations to him.’ He argued that the government cited ‘no precedent for its suggestion that a professional relationship between two attorneys who are not members of the same law firm can give rise to a conflict.'”
• “Weinberg also called it ‘utterly unremarkable’ that he and ‘Attorney A’ have had ‘two cases in common over the course of the ensuing years.'”
• “‘The undersigned counsel owes no duty of loyalty to clients of the attorney for ‘Individual A,’’ Weinberg wrote, ‘and speculation that he would ‘pull [his] punches’ and betray his responsibilities to the defendant because he has a professional relationship with a witness’s attorney is illusory and illogical.'”

“Ga. Judge Rejects DQ Bid, Questions ‘Quality’ Of Lawyering” —

• “A Georgia federal judge has said he harbors no bias against the four women suing comedian Katt Williams, but he has ‘concern about the quality of legal representation’ they are receiving in light of an explanation given for a brief that contained erroneous case citations generated by artificial intelligence.”
• “In a Tuesday order denying a motion to recuse, U.S. District Judge William M. Ray II said ‘the fact that the undersigned may have questions regarding the honesty, candor, and credibility of Ms. [Loletha Denise] Hale’s explanation for her flawed brief is not a proper basis for disqualification.'”
• “‘Indeed, judges are required to make such determinations when addressing Rule 11 violations,’ Judge Ray added, referring to Federal Rule of Civil Procedure 11, which mandates attorneys conduct reasonable inquiries into facts and law before filing papers with the court.”
• “Hale filed a recusal motion earlier this month, saying Judge Ray’s threat to sanction her for a filing that included multiple references to nonexistent cases ‘appears retaliatory and designed to chill advocacy, rather than grounded in procedural necessity.'”
• “Hale claims her daughter — who is not a lawyer or paralegal but who was helping Hale on the case — used artificial intelligence to generate a brief for the suit that was saved under the same name as the brief the attorney intended to file with the court, and that Hale uploaded the AI brief in error.”
• “Judge Ray said Tuesday he has scheduled a hearing for next week to address the possibility of sanctions because it appears Hale ‘abdicated her responsibility to ensure that the brief she signed and filed with the court was accurate.'”
• “‘Furthermore, although the undersigned has concerns about Ms. Hale’s professionalism, based not only on her flawed brief but also her prior misrepresentations in an unrelated case before this court, such concerns are not a proper basis to have a different judge assigned to preside over the matter,’ Judge Ray said. ‘To be clear, it is Ms. Hale’s conduct in this case that is at issue here.'”
• “In her request to have Judge Ray recuse, Hale had argued that his mention at a hearing in August of an unrelated case over which he presided and for which she had provided testimony was improper and showed he was biased against her.”
• “Judge Ray countered Tuesday that ‘the glaring inaccuracies of the brief prepared by Ms. Hale prompted the undersigned to recall a prior unrelated case in which Ms. Hale had made blatant misrepresentations before this court.'”
• “In that case, In Lewis v. Aimbridge Hospitality LLC, the judge said in a footnote that ‘Ms. Hale misrepresented facts to a jury when testifying under oath as a witness before this court.'”
• “Judge Ray attached a portion of a transcript from the Lewis case, which shows Hale testified that a Henry County, Georgia, judge had been removed from the bench or had agreed not to run again because of a complaint she had made against him. Judge Ray determined that the testimony was inaccurate and had told Hale during that proceeding that he was referring her to the Georgia bar for a possible ethical violation.”

“Nelson Mullins Can’t Escape Claims It Created a Conflict of Interest Involving Newly Hired Attorney” —

• “Nelson Mullins Riley & Scarborough must continue facing claims it created ‘incentives’ for an attorney’s planned 2023 move to the firm while also knowing he was ‘not honoring the duties’ he owed a Colorado inventor who hired him for a lawsuit against a Nelson Mullins client.”
• “Colorado state court Judge Jill Dorancy last week dismissed a civil conspiracy claim against the Am Law 100 firm but allowed to stand an allegation that the firm aided and abetted a breach of fiduciary duty by the lawyer for Colorado inventor Amanda Sima in a case stemming from claims a manufacturer copied Sima’s plans for a children’s drinking cup lid.”
• “Sima’s current attorney, Paul Gordon of Gordon Legal Malpractice said that, ‘assuming the case proceeds as normal,’ it could proceed to trial in Denver in summer 2026. Denver-based Nelson Mullins partner Mark Clouatre, representing the firm, declined comment.”
• “‘The court emphasizes that the court’s reinstatement of the aiding and abetting claim does not resolve whether the fiduciary actually breached the duty—only that plaintiff plausibly alleged it for purposes of Rule 12(b)(5).'”
• “The case, first filed in May 2025 in Denver County Court, stems from Nelson Mullins’ representation of Novolex Holdings and its involvement in attorney Barker’s ‘conflict’ with his representation of Sima and subsequent departure from representing her after disclosing he was joining Nelson Mullins.”
• “‘Defendants intentionally caused Benesch to terminate the contract with plaintiff,’ Sima alleged. ‘Plaintiff had a contract with Benesch in which Benesch agreed to provide legal services for plaintiff. Defendants knew their actions were likely to result in Benesch terminating Benesch’s contract with plaintiff.'”
• “In addition, ‘Nelson Mullins had actual knowledge of the conflicts of interest in discussing Mr. Barker’s employment and in hiring Mr. Barker,’ the original lawsuit stated.”
• “‘In the alternative, and in the face of the lateral hire of seven lawyers from a competing law firm, Nelson Mullins knowingly and intentionally refused to investigate whether conflicts of interest did or would exist. In any event, Nelson Mullins should have known about the conflicts.'”
• “After not hearing from Novolex, Sima said she contacted FM Turner Co. about marketing the lids. She also ‘relied on the promises of FM Turner not to disclose and not to use confidential information concerning the lids’ but was unaware the company also represented Novolex, the suit stated.”
• “Sima then claimed Turner gave information about the lids to Novolex which obtained a provisional patent for a similar product and began selling it in 2019—after which ‘investors withdrew their financing’ for Sima’s product.”
• “She then retained Barker and Novolex hired Nelson Mullins for the case.”
• “Dorancy wrote in a filing last week that Benesch advised Sima to ‘allow Benesch to accept documents from Nelson Mullins without disclosing the nature and content to plaintiff’ after she agreed to an Attorney Eyes Only (AEO) agreement.”
• “‘Benesch then entered into the AEO agreement, telling her that her claims against Novolex lacked merit. Then, within a month, plaintiff’s attorney [Barker] publicly disclosed, unbeknownst to her at the time, that he was joining Nelson Mullins.”
• “‘These allegations, if true, plausibly support an inference that [Nelson Mullins and Novolex] knowingly participated in and substantially assisted a breach of fiduciary duty. Whether the proof ultimately bears this out is for another day.'”
• “‘Because Benesch’s alleged breach of duty is on appeal in Illinois, the first element—whether a fiduciary duty was breached—may be unresolved,’ Dorancy wrote. ‘Once the issue is resolved, the court finds the analysis regarding the aiding and abetting claim may change as they may be foundational to the claim of aiding and abetting.'”

“Reed Smith Blasts DQ Attempt As ‘Litigation Gamesmanship’” —

• “A shareholder of the Venezuelan airline Avior Airlines has urged a Florida federal judge to reject a bid to disqualify his counsel at Reed Smith LLP and attorney Ana R. Ulseth, arguing that the push to disqualify the firm is not about ethics but rather ‘litigation gamesmanship.'”
• “Jorge de Jesus Añez argued in a response Thursday that a motion to disqualify his counsel is a baseless tactic since its work in the disputes hasn’t created any conflicts. Añez added that the motion filed by feuding shareholders is ‘procedurally improper, legally unfounded, and factually misleading.'”
• “The petitioners, shareholders Luis A. Suarez Magual, Moises Maionica and Carlos Kauffmann, argued that the engagement of the law firm was not approved by a majority of the shareholders as required by the company’s bylaws. They say Añez has taken control of Avior in spite of an International Chamber of Commerce arbitration award stating that they own 50% of the airline.”
• “They also pointed to a November 2020 decision by former Miami-Dade Circuit Judge Michael Hanzman that found the Suarez group holds a 50% stake in Avior.”
• “‘Nothing approved by the illegitimate board is a valid corporate act, including the retaining of Reed Smith as counsel,’ the Suarez group said in their motion. ‘As evidenced by Ms. Ulseth and Reed Smith’s appearance, Añez continues to operate Avior as if the Hanzman order, the ICC award and Avior’s by-laws do not exist.'”
• “None of the members of the Suarez Group, as 50% owners of Avior, approved or ratified Ulseth and Reed Smith’s representation of the airline, according to their August motion to disqualify. They said Avior is operating with an illegitimate board that was unilaterally appointed by Añez.”
• “Ulseth and Reed Smith also have a conflict of interest due to their dual representation of Avior and Añez, according to the motion. That’s because Ulseth and Reed Smith also represent Añez in the related case, called Jorge Anez v. Luis Suarez, Carlos Kauffmann and Moises Maionica, as well as Avior Airlines CA et al. v. Luis Suarez, both in Florida’s Eleventh Judicial Circuit.”
• “But Añez said the other shareholders set forth a narrative in their motion that is ‘riddled with misrepresentations.'”
• “‘They distort the factual record, mischaracterize the nature and scope of Reed Smith’s involvement in the relevant cases, and mislabel claims to suit their agenda — going so far as to describe Mr. Añez’s individual damages suit as a ‘derivative action,’ despite the clear allegations to the contrary,’ Añez said.”
• “He added, ‘In reality, Reed Smith’s representations have been narrow, nonoverlapping, and entirely consistent with the ethical rules.'”
  “Aside from those concerns, Añez argued that the court does not need to decide on the merits of the motion because it fails for two independent and dispositive reasons. The first being that the other shareholders lack standing to even bring the motion… Additionally, even if the group had standing, they waived any right to challenge Reed Smith’s representation because they’ve known about the alleged conflict for more than a year and half and still ‘actively litigated against Reed Smith without objection, including at hearings and depositions, and engaged in extensive conferral regarding attorneys’ fees in the postjudgment case.'”

“Prosecutors may move to oust James Comey’s defense lawyer” —

• “Federal prosecutors signaled Sunday that they may seek to boot Patrick Fitzgerald, James Comey’s lead defense attorney, because of Fitzgerald’s alleged involvement in disclosures to the media shortly after President Donald Trump fired Comey as FBI director in 2017.”
• “In a submission Sunday evening, prosecutors suggested to U.S. District Judge Michael Nachmanoff that Fitzgerald, Comey’s lawyer and close friend, could have an insurmountable conflict of interest as a result of the disclosures.”
• “The prosecutors asked the judge to quickly approve a proposal for a ‘filter team’ of lawyers to sift through evidence in Comey’s criminal case that could clarify Fitzgerald’s role in the 8-year-old disclosures — without breaching Comey’s attorney-client privilege.”
• “Prosecutors proposed the ‘filter team’ to the court last week, but in the new filing they said the request has particular urgency because Fitzgerald played a role in Comey’s release of information that officials later deemed classified.”
• “‘Based on publicly disclosed information, the defendant used current lead defense counsel to improperly disclose classified information,’ prosecutors Tyler Lemons and Gabriel Diaz wrote. ‘This fact raises a question of conflict and disqualification for current lead defense counsel.'”
• “Fitzgerald fired back at prosecutors Monday morning, accusing them of attempting to ‘defame’ him with demonstrably false allegations.”
• “‘There was no ‘leaking’ of classified information to the press by either Mr. Comey or his counsel. Full stop,’ Fitzgerald and other defense attorneys wrote.”
• “About a month after Comey was fired, he acknowledged during Senate testimony that he asked another lawyer and friend, Columbia law professor Daniel Richman, to give versions of memos he had written about his conversations with Trump to The New York Times in a bid to make sure a special counsel was named to investigate Trump’s conduct.”
• “The inspector general report found that some of the information Comey shared with his attorneys was classified and faulted him for sharing sensitive investigative information with outsiders and the media, but also found no evidence ‘that Comey or his attorneys released any of the classified information contained in any of the memos to members of the media.'”
• “Fitzgerald argued in the filing Monday that he and Comey acted appropriately in that episode and that Comey shared information with him as he mulled his legal options related to the firing.”
• “‘After Mr. Comey was fired on May 9, 2017, he sought legal advice with respect to his termination and with regard to having witnessed behavior by the President that he considered unlawful,’ Fitzgerald wrote. He said Comey attempted to segregate some memos with classified information from others he deemed unclassified, but that others came to different judgments after the fact and deemed a portion of one memo he’d shared with his lawyers to be classified at the lowest level used by the government.”
• “The Inspector General report noted that the FBI moved to delete the materials Fitzgerald received from his email accounts — and that Fitzgerald, a former U.S. Attorney in Chicago, ‘voluntarily and promptly’ cooperated.”
• “The prosecution’s filing came one day before Comey’s lawyers are scheduled to file their first substantive motions in the case. Comey’s lawyers are set to seek to dismiss the case on grounds of selective and vindictive prosecution as well as on the grounds that the Trump-appointed prosecutor who brought the case, Lindsey Halligan, was not lawfully installed as the interim U.S. attorney for the Eastern District of Virginia.”

Why law firm risk leaders receive recognition, it’s worth noting — Congrats, Robyn! — “DLA Piper shortlisted for five Financial Times 2025 North America Innovative Lawyer awards” —

• “Finally, Robyn Spanier, the firm’s Executive Director of New Business Intake and Procurement, was shortlisted in the Innovation in Strategic Direction category for her role revolutionizing the firm’s new business intake process, leading to market-leading turnaround times for running conflict searches and processing new matters.”
• “This year’s North America Innovative Lawyer awards ceremony will be held in New York on December 8.”

“Chris Cuomo Loses Appeal Bid to Disqualify Arbitrator in CNN Proceedings” —

• “Chris Cuomo can’t revive his bid to disqualify the arbitrator overseeing his $125 million claim against CNN, a New York appeals court has ruled.”
• “The court found that Cuomo ‘did not set forth facts to indicate that the arbitrator was biased in his handling of the arbitration.’ He had initiated the proceedings after he was fired by CNN in 2021 after a deposition revealed he gave advice to his brother, former New York Gov. Andrew Cuomo, who was accused of sexual harassment.”
• “Cuomo’s lawyers had moved to remove JAMS arbitrator Stephen Sonnenberg because he failed to disclose four CNN-related matters that his former law firm handled when he worked at Paul Hastings. He was also personally involved in a 2003 case involving the network, though he said he had no recollection of the matter.”
• “In the order, issued on Tuesday, the court stressed that Cuomo’s lawyers had no issue with the 39 orders issued so far in the arbitration. ‘Nor did counsel claim there was any misconduct on the part of the arbitrator, and was willing to proceed with the arbitration, but only if a new arbitrator was selected by the parties,’ the ruling stated. ‘However, an arbitrator may not be disqualified solely because of his relationship to a party, but rather, upon facts demonstrating partiality to a litigant.'”
• “Cuomo’s bid for discovery to explore Sonnenberg’s recollection of the CNN case he was involved in was properly denied since it was grounded in speculation that he wasn’t honest, the appeals court concluded. It also pointed to Sonnenberg handling the case more than 20 years ago and that his firm was only paid $3,000 in legal fees.”
• “Cuomo had been with CNN since 2013, first as the anchor of its morning show New Day, and then as a primetime host, where he would often have more of a ‘take’ on the day’s news. In the early weeks and months of the pandemic, he also hosted his older brother on his CNN program, with Zucker and Gollust’s blessing, despite there being a ban on such interviews since 2013. He currently hosts a show on rival cable outlet NewsNation.”

“When Disclosure Becomes Disqualification: Management of Arbitrator Disclosure in MTCC No. 1251 v Windsor Arms” —

• “The appearance of arbitrator bias has been a topic of significant interest in recent years, as well as significant concern given the risks it poses. As a result, any case law that handles new or uncommon factual applications of this issue will be of interest to readers.”
• “One recent example is MTCC No. 1251 v Windsor Arms Hotel Corp., 2025 ONSC 5009, where the Ontario Superior Court considered the issue of an arbitrator having an unrelated matter referred to them by a party’s expert witness, as well as the arbitrator’s handling of the potential appearance of a conflict of interest once it arose. While the Court acknowledged that a single business referral may not be sufficient grounds for disqualification, the arbitrator’s subsequent handling of the conflict created an undeniable perception of partiality. Below, we review the decision.”
• “Roughly 30 hours before the hearing was set to begin, the arbitrator emailed the parties to disclose a ‘clear appearance of conflict.’ The conflict stemmed from the fact that the Tax Expert had recently referred an unrelated litigation matter to the arbitrator’s law firm, and the arbitrator himself had been tasked with ‘preparing the pleadings and assuming carriage of it.’ The arbitrator advised that he had no prior dealings with the Tax Expert, and that no discussions had occurred with respect to his involvement in the arbitration.[3]”
• “The arbitrator’s email presented three options to resolve the conflict: (1) his resignation, (2) a written waiver from both parties, or (3) the exclusion of the Tax Expert’s evidence with a corresponding adjournment to allow MTCC 1251 to retain a new expert. The next day, counsel for Windsor Arms asked the arbitrator to elaborate, taking the position that there was no conflict.”
• “Counsel also suggested a fourth option that the Arbitrator did not mention: ‘the client [who had been referred to the Arbitrator’s firm] could retain someone else and [the Arbitrator] would no longer act.’ In response, the arbitrator reiterated his position, advising that he was content to proceed with the arbitration provided that ‘everyone signs off in one way or another about what might be perceived to be a conflict of interest.'”
• “On the day the hearing was scheduled to begin, MTCC 1251 declined to waive the conflict. Windsor Arms, however, took the position that there was no conflict and the arbitration should proceed. The arbitrator then reversed his position, stating that because Windsor Arms objected to him withdrawing (in other words, because there was no agreement between the parties that his withdrawal was necessary), he would no longer resign. In a series of subsequent emails, the arbitrator suggested the arbitration could and should still proceed, prompting MTCC 1251 to bring a formal motion (within the arbitral process) for his removal. The arbitrator heard the motion and determined that there was no conflict. Consequently, MTCC 1251 commenced an Application in the Superior Court of Justice.”
• “The sole issue before the Court was whether the circumstances gave rise to a reasonable apprehension of bias, a standard set out in s. 13(1) of the Arbitration Act, 1991, which provides that a court may remove an arbitrator where circumstances exist that may give rise to a reasonable apprehension of bias.”
• “The Court, after a de novo review of the facts and the applicable law, concluded that the apprehension of bias was reasonable and that the arbitrator should be disqualified. The Court agreed with the arbitrator that in many cases, a single business referral might not be sufficient for removal; however, in this particular case, the arbitrator’s subsequent conduct following his initial disclosure – when considered in its entirety – gave rise to a reasonable apprehension. The Court identified seven key events in support of this conclusion.”
• “Although Windsor Arms does not necessarily raise a novel issue of law, it does emphasize how the management of an arbitrator’s disclosure, rather than the subject matter of the disclosure itself, can be determinative on a test for reasonable apprehension of bias, and that such management can colour events normal to the arbitration process in such a manner that they are construed in a different light.”
• “Most obviously, the arbitrator’s own assessment of their disclosure carries significant weight. The arbitrator’s initial declaration of a ‘clear appearance of conflict’ was not merely a disclosure; rather, it was a determinative self-assessment by the person with the fullest knowledge of the facts. The arbitrator’s reversal on this point was, unsurprisingly, fundamentally impactful to the test for apprehension of bias.”
• “On the other hand, however, the arbitrator was placed in a somewhat invidious position in that his non-disclosure of his communications with the Tax Expert, while relevant to the Court’s analysis, appeared to be the correct approach with respect to the preservation of privilege. It might have been possible for the arbitrator to seek the unrelated client’s waiver of that privilege in order to permit the disclosure of those communications, but there would have been no guarantee that the client would agree to such a request. Furthermore, given the abbreviated timeline of events, this might simply not have been logistically possible in the time available.”
• “Similarly, the exclusion of the clients from the case conference – which is generally unremarkable in normal circumstances – was instead determined to be an additional factor that exacerbated the apprehension of bias. Evidently, procedural decisions – even if standard – must be weighed against the specific circumstances of the parties and the situation at hand.”
• “By contrast, it is equally important to highlight the Court’s emphasis that a single business referral might not be grounds for disqualification. As we have written elsewhere, serving as an arbitrator is an inherently commercial endeavour, and so too is maintaining a practice as counsel at the same time. In such circumstances, it is entirely possible that these two spheres may overlap – particularly in specialized industries – such that professional relationships and business referrals may exist between participants in an arbitration.”
• “Ultimately, Windsor Arms perhaps speaks most directly to the challenge of managing disclosures for arbitrators wearing more than one hat – i.e. maintaining a counsel practice while practicing as an arbitrator (and in some circumstances, an expert witness practice as well). Ultimately, arbitrators and counsel will need to remain mindful not only of the need for disclosure, but of the manner in which such disclosures are managed as well.”

“Atty-Trustee Conflicts Doom Scaife Estate’s $26M Tax Refund” —

• “A Strassburger McKenna Gutnick & Gefsky attorney was also acting as Mellon heir Richard Scaife’s lawyer, trustee and media executive when he signed releases that kept Scaife’s spending of his inheritance secret from his children, so a resulting $200 million settlement between the children and Scaife’s estate was not a bona fide tax-exempt expense, a Pennsylvania appeals court ruled Tuesday.”
• “Citing the apparent conflicts of interest from attorney H. Yale Gutnick’s multiple hats, a three-judge Commonwealth Court panel said the agreements indemnifying the trustees that Scaife signed every time he withdrew money from a family trust were not presumptively valid. Scaife’s estate therefore could not claim the $200 million the trustees paid to replenish the account as an expense of the estate and claim a $26 million refund on state inheritance taxes.”
• “‘Conflicts of interest and fiduciary duties abound in the numerous and layered transactions underlying this matter. Those transactions, in the end, resulted in a several-hundred-million-dollar liability of the estate, the complete absolvement of the trustees of any liability for distributions, and the payment to attorney Gutnick’s law firm of approximately $1.6 million in attorneys’ fees,’ Commonwealth Court Judge Patricia McCullough wrote in the panel’s opinion. ‘Although we cannot divine whether these results were intended by decedent, we must agree with the Westmoreland County Orphans’ Court’s determination that the estate has not succeeded in removing them from suspicion’s reach.'”
• “Scaife had been a beneficiary of a trust that his mother, Sarah Mellon Scaife, had established in 1935, with any children he would have as ‘remainder beneficiaries.’ The trustees of that fund, including Gutnick, allowed Scaife to make 19 withdrawals from the trust between 1996 and his 2014 death, each time without seeking court approval — allegedly to hide the distributions from his children, David and Jennie, the Commonwealth Court said.”
• “To protect themselves, the trustees had Scaife sign agreements each time indemnifying them from any consequences of the withdrawals, which eventually drained all $400 million from the trust to support Scaife’s media holdings.”
• “Upon discovering that the trust had been drained and left nothing for them, David Scaife and Jennie Scaife’s estate sued the trustees. They reached a $200 million settlement in early 2020, and the trustees sought to have that deducted from the value of Scaife’s estate for state and federal inheritance taxes.”
• “But in order for an estate’s liabilities based on promises or agreements to be deductible, the deals need to be genuine or ‘bona fide’ and made in consideration for money or something worth money.”
• “In oral arguments in February, Gutnick’s attorney David Strassburger told the panel that the indemnifications were bona fide agreements between Scaife and the trustees, since Scaife got the ‘consideration’ of not having to go through the courts to access the money.”
• “But the Commonwealth Court said Tuesday the agreements were not genuine, because Gutnick had conflicts of interest in getting Scaife to sign them. Gutnick had been a personal friend Scaife’s; his personal and business attorney; trustee of multiple trusts, including the 1935 trust and other parts of the family fortune; executor of Scaife’s estate; and a board member and president of Scaife’s newspaper companies.”
• “Scaife had not had an outside attorney review the indemnification agreements before signing them, and Gutnick got both the benefit of indemnification and the money going to the media companies he helped run for Scaife, the opinion said.”
• “‘Both the execution and postmortem enforcement of the indemnification agreements clearly were born of a multi-layered confidential relationship between decedent and attorney Gutnick that implicated the array of attorney Gutnick’s significant and potentially conflicting professional and fiduciary duties,’ the opinion said. ‘As a matter of law, then, the indemnification agreements, in this context, are presumptively voidable.'”

“Musk Atty Alex Spiro Faces DQ Bid Ahead Of Twitter Deal Trial” —

• “A certified class of former Twitter investors accusing Elon Musk of tanking the social media platform’s stock during acquisition negotiations has urged a California federal judge to disqualify Musk’s proposed lead trial counsel Alex Spiro before a January trial, arguing he’s a ‘critical first-hand witness’ and may testify, according to documents unsealed Monday.”
• “In a motion filed Sept. 26 and partially unsealed Monday, the investors argue Quinn Emanuel Urquhart & Sullivan LLP partner Alex Spiro’s possible direct involvement in key events surrounding the billionaire’s $44 billion acquisition of Twitter in 2022 makes him a key witness, creating a conflict under the advocate-witness rule.”
• “The investors argue allowing Spiro to represent Musk at trial when he may also be called to the stand would create a ‘grave risk of jury confusion, make a mockery out of these proceedings and inflict serious prejudice on plaintiffs.'”
• “They added that even if Spiro agrees to testify, that would still create confusion, and the investors say Spiro has been almost entirely absent from the litigation, appearing only via videoconference, while his colleagues have handled the case for years.”
• “In the investors’ latest motion, they argue that in recent years, Spiro and former banker Jared Birchall helped manage Musk’s financial, business and legal affairs, and helped Musk obtain counsel. Musk failed to timely file reports with regulators after he acquired a 9% stake in Twitter between January and March 2022.”
• “Spiro was Musk’s business adviser and helped him organize his unsolicited pursuit of Twitter in April 2022, serving as the direct supervisor for the work Morgan Stanley and Skadden Arps Slate Meagher & Flom LLP were doing for Musk, the motion said.”
• “The investors argued that at trial they plan to show Musk used Twitter’s estimate of the number of spam accounts as a pretext to exit or renegotiate his obligations to acquire Twitter for $54.20 per share, and in light of his purported role as an adviser to Musk, Spiro likely has ‘unique and highly relevant knowledge’ about those issues, the motion said.”
• “Further complicating matters, the investors said, Spiro was so ‘enmeshed’ with the key events of the case that there is the ‘perplexing likelihood that Spiro himself will cross-examine a number of witnesses about their 2022 interactions with him.'”
• “The investors added that ultimately Spiro is a seasoned trial lawyer who narrates extensively when examining witnesses and who has his own media presence, ‘all of which greatly enhances the risk that he will take advantage of his skills and notoriety to cross-contaminate witness testimony and advocacy.'”
• “A hearing on the motion to disqualify is set for Oct. 31 before Judge Breyer, on the same day he is set to hear arguments on the motions for summary judgment.”

“Law Firms’ Trump Deals Escape NY Lawyer Ethics Investigation” —

• “A disciplinary body for New York lawyers is putting off an ethics probe into major law firms’ deals with President Donald Trump. A New York Supreme Court committee last month declined to take up a complaint against nine firms that pledged nearly $1 billion in free legal services to White House in exchange for the removal of administrative probes and punishments, according to documents obtained by Bloomberg Law. The complaint, filed by a group of law professors, accused the firms of violating ethics rules by ‘capitulating’ to Trump’s ‘bullying.'”
• “‘The business decisions of law firms, such as the selection of clients or the allocation of pro bono resources, generally fall outside the purview of this Committee,’ Jorge Dopico, chief attorney for the committee, said in a Sept. 2 letter.”
• “Those deals became a flashpoint of criticism for some of the country’s largest and most powerful law firms. Paul Weiss was the first to reach an agreement after it was the subject of an executive order. The other firms made deals to avoid that fate and to resolve investigations into their diversity programs.”
• “The court’s attorney grievance committee plans to ‘defer further investigation,’ Dopico said in the letter. He did not immediately respond to a request for comment.”
• “Four law firms hit by executive orders over their ties to certain attorneys and cases sued the Trump administration, winning injunctions. The orders—against Perkins Coie, Jenner & Block, Susman & Godfrey, and WilmerHale—blocked lawyers’ access to government buildings, revoked security clearances, and threatened their clients’ government contracts.”
• “The professors’ complaint alleges the firms that made deals with Trump violated their duty to maintain the independence of the legal profession. They also engaged in bribery and extortion by giving the president ‘a ‘war chest’ worth nearly a billion dollars to spend as he pleases on his favorite political causes,’ according to the professors.”
• “Although the firms ‘are the victims of the illegality, they nevertheless had a choice to either litigate, as other firms did, or pay the bribes,’ the professors said in the complaint. ‘They chose to be extorted and pay the bribes.'”
• “The professors have asked the grievance committee to reconsider its decision, arguing that it can ask the firms to produce documents and testify under oath regarding the deals.”
• “‘The very existence of an investigation will inform the Respondents, the President, other firms that might find themselves in his crosshairs, and ultimately the public at large, that New York’s Attorney Grievance Committee is serious about protecting the independence of the legal profession and the sanctity of the rule of law,’ the law professors wrote.”
• “The complaint did not seek discipline for any individual lawyer at the firms. Instead, it sought a public censure or an order requiring the firms to ‘cease and desist from further compliance with the commitments they made.'”

Now in its fourth year, the 2025 Law Firm Risk Staffing Compensation Survey report is hot off the presses! (And also now on file with the US Copyright Office.) If you took the survey, please watch for your reports/benchmarks via email today!

The 2025 exercise built on past year’s exercises in some new and interesting ways. (Yes, New York, you got your local spotlight! And everyone should find the new percentile metrics helpful.)

We saw a modest 5% increase in data collected, 108 participants contributed data on 697 US-based risk positions. (As noted previously, Canada was treated separately this year.)

We had great response levels from manages who participated in the optional Q&A portion. That generated another wave of fascinating feedback and response, coming in at 20+ pages of commentary, which is presented in the report, grouped by firm size bands, addressing six questions:

1. 1. What are your top challenges tied to risk staff recruiting, training, and career development?
   2. What are your goals for risk staff recruiting, training, and career development in 2025?
   3. To what extent are you adding new/emerging roles to your risk organization (e.g. OCG, AI related)? If new roles aren’t yet defined or funded, which would you like to add if possible?
   4. Are there staffing model changes you’re pursuing or would like to pursue moving forward?
   5. What is your firm’s remote work strategy for risk? What challenges/opportunities, if any, does remote work present for your firm and its staffing strategy?
   6. What risk initiatives, if any, is your firm focusing fresh investment in new staff, new resources for 2026?

For those who participated, I expect to have PDFs in your inboxes by the end of the day. Depending on your participation:

• Managers who contributed team data and participated in the Q&A will receive the “extended edition” of the report, coming in at 43 pages, which includes peer Q&A responses
• Managers who contributed team data only will receive the “standard edition” of the report, which includes complete data on all positions and compensation data included in the extended version (20 pages).
• Individual contributors who shared their personal details, will receive a personal benchmark compensation summary relevant to their specific role and firm demographics.

If you/your law firm did not participate in the survey, we’re making copies or personalized benchmarks available for a fee. Please get in touch for details. 

I’d like to thank everyone who participated. I hope the results and analysis provide fresh insight and support to those looking for greater clarity on industry compensation practices and trends.

Thoughts are brewing for 2026…

Thanks!

“Litigation Funding’s Influence on Cases Warrants Disclosure Rule” —

• “Third-party litigation funding, or TPLF, is a multibillion dollar industry of financing lawsuits in exchange for a cut of any judgment or settlement. Leaders of these businesses have disavowed any control over the cases they finance.”
• “But a recent analysis of their own contracts reveals that funders have significant control over their clients’ litigation, despite their claims to the contrary. To ensure fairness in the legal system, the Advisory Committee on Civil Rules should adopt a rule requiring disclosure of TPLF contracts.”
• “An executive of Burford Capital, the world’s largest litigation funder, in 2022 told an audience of judges, ‘I don’t know how to say this any more clearly; we don’t control settlement. If we do … I would find it really loathsome to misrepresent that to a court.'”
• “At around that time, Burford was seeking to enforce its contractual rights to prevent its client, Sysco Corp., from consummating a settlement agreement in a lawsuit that Burford had funded.”
• “A new analysis based on the limited number of TPLF contracts that have become public shows that such contracts give non-party funders specific mechanisms of control or significant influence over litigation, including the authority to reject settlement terms if funders don’t find their return satisfactory.”
• “The potency of these hidden control mechanisms may be ‘rather amazing’—as the US Bankruptcy Court of the Northern District of Texas found in In re Fresh Acquisitions, LLC—given funders’ disavowals of control. Generally, courts and litigants have no awareness of such provisions because the funding contracts typically prohibit the plaintiff and counsel from divulging the agreement’s existence or discussing its terms.”
• “Control by non-party funders matters, because our litigation system is set up to enable parties and their lawyers to resolve disputes based on facts (rather than speculation) with the aid of the court.”
• “When non-parties dictate or influence crucial decisions such as going to trial, settling, and replacing counsel, it can have a profound or disruptive effect on the litigation. At a minimum, it prevents parties who are unaware of the funding agreements from making a full and fair appraisal of their case—an ability that is fundamental to our legal system.”
• “Some TPLF contracts expressly give non-party funders complete control over the litigation. Others ensure that funders have indirect (but still powerful) influence by requiring the funded plaintiffs and lawyers to pursue the claims and maximize proceeds, and by allowing funders to stop the cash flow at any time.”
• “TPLF contracts also may give funders remarkable influence over plaintiffs’ counsel, including the selection and replacement of counsel. Some extend this influence further by obligating the plaintiff to take directions from counsel.”
• “Provisions of TPLF contracts can shape outcomes and undermine court orders, such as by requiring the plaintiff to pay the funder the monetary value of any injunctive relief or specific performance awarded. This is a strong incentive against non-monetary relief that can skew the remedies presented to, and ultimately ordered by, the court.”
• “Some TPLF contracts require that the plaintiff and counsel provide all documents obtained in the course of litigation to the funders, a provision likely inconsistent with most protective orders, and which may even risk improper dissemination of intellectual property.”
• “As more disputes over TPLF contracts come to light, judges are increasingly recognizing the need to know whether non-parties have control over the named parties’ litigation decisions and the ability to influence key decisions in the litigation.”
• “All courts should understand that when funders are participating in litigation, their involvement and agreements should be disclosed just like all other participants in public litigation, who must identify themselves openly with very limited exceptions.”
• “The Federal Rules of Civil Procedure require companies to disclose their insurance agreements so that ‘counsel for both sides to make the same realistic appraisal of the case.’ Courts routinely insist that the insurer’s decision-makers participate in key events in the litigation, including pre-trial and settlement conferences.”
• “Last year, a letter signed by more than 100 companies representing the technology, financial services, health care, transportation and telecommunications industries called for a rule requiring TPLF investors to disclose their contracts.”

“Minister ‘very hesitant’ on third-party funding” —

• “The Minister for Justice has said that he has concerns about the introduction of third-party litigation funding in Ireland.”
• “Jim O’Callaghan was speaking at a conference on dispute resolution organised by business-law firm Mason Hayes & Curran (MHC).”
• “The law in Ireland currently prohibits the funding of legal cases by outside parties who do not have a legitimate and independent interest in the dispute, subject to the certain exceptions. The Law Reform Commission (LRC) is looking at the issue and is expected to publish a report by the end of this year.”
• “Minister O’Callaghan told the MHC event that, while third-party funding offered potential access-to-justice benefits, there was a risk of ‘commodifying justice’.”
• “He said that he could not ignore the experiences of other countries that provided proof that the ‘big winners’ from third-party litigation funding were lawyers.”
• “‘I have no interest, in my role as Minister for Justice, in enriching lawyers’, he said, adding that members of the profession could do that themselves by doing a good job and getting paid fairly.”
• “The minister said that, while he would wait for the LRC report and consider it closely, ‘ultimately, I’m very hesitant about it’.”
• “In a panel discussion on third-party funding, barrister Emily Egan McGrath SC said that the Irish courts had shown ‘increasing frustration’ about the lack of legislative reform in the area, and had shown a tendency to expand existing exceptions.”
• “She cited the case of Campbell v O’Doherty [Trading as The Irish Light], where the High Court rejected a challenge to the proceedings based on the fact that the plaintiff benefited from crowdfunding.”
• “The barrister told the event that the judgment, however, did not engage with the wider issues raised by crowdfunding, such as whether funders could be liable for costs.”
• “MHC partner Colin Monaghan said that there was now ‘more nervousness’ in Britain, where there had been less regulation in the area, about how the litigation-funding industry had developed.”
• “The panel also discussed other issues raised by third-party funding, such as whether advice given to clients should also be given to funders.”
• “MHC partner Rory Kirrane SC told the event that conflicts over the spoils of litigation had led to what he described as an ‘unedifying’ sub-class of litigation between plaintiffs and funders emerging.”
• “He said that this was ‘an evil that needed to be guarded against’ in any proposed changes.”
• “Asked about who should regulate any reformed third-party-funding regime, there was broad agreement among the panel that one of the existing regulatory bodies, such as the Central Bank or CCPC, would make more sense than setting up a new watchdog.”
• “The former chief justice, who is president of the LRC, concluded that the area was ‘a gap that needed to be filled’, but added that it needed to be regulated to genuinely contribute to access to justice.”

“Pfizer, other drugmakers ask court to bar ex-prosecutor from price-fixing lawsuits” —

• “A former government antitrust enforcer who oversaw price-fixing cases for U.S. states against major generic drugmakers should be barred from working on similar matters at his private law firm, a group of pharmaceutical companies told a federal judge on Wednesday [9/10].”
• In filings in federal court in Philadelphia, Pfizer, Teva, Mylan and several other drugmakers said that the lawyer, Joseph Nielsen, a former assistant Connecticut state attorney general, and his law firm should be disqualified from representing insurers Molina and Humana in ongoing antitrust litigation.”
• “The companies claimed that Nielsen, who had worked for Connecticut for nearly 20 years until July, acquired confidential information while overseeing drug-price litigation for the state against dozens of drug manufacturers.”
• “The Lowey firm told the defendants that Nielsen would not share confidential information gained from past settlement negotiations and that there were no restrictions on his representation of Molina and Humana, the drugmakers said in their court filings.”
• “Nielsen’s participation in the lawsuit runs afoul of rules restricting the work of government lawyers who enter private practice, the drugmakers alleged. ‘He undoubtedly has unique insight into how defendants assess the merits, value the claims, approach settlement negotiations, and is able or unable to satisfy any judgment or settlement demand,’ according to the drugmakers. ‘He cannot unlearn any of that.'”
• “Nielsen began representing Molina and Humana in July as a newly-named partner at Lowey. The firm markets its work for major insurers seeking damages for alleged overcharges for prescription drugs.”
• “The push to disqualify Nielsen and his firm comes after Humana’s lawsuit was selected last week by U.S. District Judge Cynthia Rufe in Philadelphia as a bellwether case to test claims against the drugmakers, and was set for trial in September 2026.”

“Fla. Judge’s DQ Not Required Over Prior Sheriff’s Office Work” —

• “A Florida state judge who previously worked for a sheriff’s office is not required to disqualify themself from a criminal case in which sheriff’s deputies are witnesses, according to an opinion published by the Florida Judicial Ethics Advisory Committee.”
• “The committee responded to a judge asking if their previous role as chief legal counsel for a sheriff’s department called for disqualification in a case they were presiding over in which sheriff’s deputies are appearing as investigative witnesses. In an opinion from Sept. 12 titled JEAC Opinion 2025-15, the committee found the judge did not.”
• “In that role, they represented the sheriff in civil matters such as asset forfeitures, risk protection orders, public records disputes, small claims matters, civil liability matters, and policy and procedure advisement. Additionally, the judge was primarily involved in the administrative operations of the sheriff’s office rather than as a witness or investigator in active criminal investigations.”
• “‘The inquiring judge’s role was not to represent deputy sheriffs in their individual capacity, but rather the sheriff in his official capacity when the sheriff was a party to a civil case or controversy,’ the opinion said.”
• “Judges in Florida must disqualify themselves under the Florida Code of Judicial Conduct if their impartiality might reasonably be questioned, according to the opinion.”
• “The committee referenced another opinion from 2021 on a similar subject matter. That opinion, named 2021-18, considered whether a judge served as a lawyer on a matter before the court and not simply the nature of the judge’s previous employment.”
• “‘But that does not appear to be the case in the current question for this committee,’ it said.”
• “The committee added that disclosure of the judge’s previous role when the sheriff’s office is an investigating entity and not a litigant is also unnecessary.”